The British Tesco supermarket giant plans to expand substantially in Malaysia, opening 20 more stores within the next five years, according to a report over the weekend.

Tesco Stores Malaysia chief executive officer James Caan said the company would work closely with the government and relevant authorities to identify suitable locations, including in existing shopping malls.

"We are going to open as many as allowed," he told the official Bernama news agency in Johor after the signing of a lease agreement for a new hypermarket there.

Tesco Malaysia, which is 70 percent owned by Tesco in a joint venture with Malaysian conglomerate Sime Darby, already has 10 outlets in Malaysia with a total investment of RM800 million, Bernama said.

Malaysia has restricted the entry and expansion of hypermarkets in the country in recent years to protect smaller local businesses.

Bernama said Tesco expects to invest between RM50 million to RM120 million for each new store.

Tesco - the world's third biggest retailer after US giant Wal-Mart and France's Carrefour - operates in 12 countries in Eastern Europe and Southeast Asia.